Trade tensions push down Wall Street
NEW YORK (Reuters) – U.S. stocks dipped on Wednesday as reports that Washington could impose restrictions on another Chinese technology company further inflamed trade tensions between the world’s two largest economies.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 20, 2019. REUTERS/Brendan McDermid/File Photo
Fears that tit-for-tat tariffs and other retaliatory actions by the United States and China will hit global growth have kept investors on edge, putting the S&P 500 on track to post its first monthly decline since the December selloff.
Media reports on Wednesday said the Trump administration was considering sanctions on video surveillance firm Hikvision, the second major Chinese technology company facing U.S. curbs.
The release of minutes from the Federal Reserve’s latest policy meeting, in which officials agreed that their patient approach to setting monetary policy could remain in place “for some time,” had little impact on Wall Street’s major indexes.
“I don’t think the Fed is a major consideration for the market right now,” said Robert Phipps, a director at Per Stirling Capital Management in Austin. “There are times when geopolitical factors overwhelm everything else, and we believe this is increasingly one of those times.”
“The Fed meeting took place before the trade deal blew up,” he added.
The Dow Jones Industrial Average fell 50.18 points, or 0.19%, to 25,827.15, the S&P 500 lost 2.37 points, or 0.08%, to 2,861.99 and the Nasdaq Composite dropped 11.30 points, or 0.15%, to 7,774.43.
Also weighing on the markets was Qualcomm Inc’s 11.4% plunge, among the biggest declines on the S&P 500.
A federal judge ruled that the chipmaker illegally suppressed competition in the market for smartphone chips by threatening to cut off supplies and extracting excessive licensing fees.
Retailers wrapped up the first-quarter earnings season on a downbeat note, with Lowe’s Cos Inc shares falling 12.3% after the home improvement chain cut its full-year profit forecast. Lowe’s was among the biggest drags on the S&P 500 consumer discretionary sector index, which fell 0.7%, as well as the S&P 500 at large.
Nordstrom Inc shares declined 9.6% after the department store operator reduced its full-year sales and profit forecasts.
However, shares of Target Corp jumped 9.3%, the most among S&P 500 companies, after the retailer’s quarterly same-store sales and profit beat estimates.
Declining issues outnumbered advancing ones on the NYSE by a 1.57-to-1 ratio; on Nasdaq, a 1.75-to-1 ratio favored decliners.
The S&P 500 posted 27 new 52-week highs and eight new lows; the Nasdaq Composite recorded 39 new highs and 109 new lows.
Reporting by April Joyner; Additional reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Nick Zieminski